Has eating out become too expensive?
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Restaurant prices look set to jump and diners may get less on their plates as the effects of a big wage rise for hospital kitchen staff and cleaners flow into the hospitality industry.
The Restaurant Association says meal prices were already coming under pressure from other cost increases before the hospital staff won a starting rate of $14.25 an hour this week - $3 above the minimum wage of $11.25.
The new rate, agreed to by district health boards, Spotless Services and three other cleaning companies for the 3000 service workers in public hospitals, has no direct effect on the 80,000 staff in restaurants. But association chief executive Alistair Rowe said it was bound to flow on.
"If Spotless are forced to pay this, and they are a major caterer, where does that leave the rest of their workforce?" he asked.
"This settlement by Spotless is going to have an inflationary impact. Prices will have to go up."
Tony Adcock of the Harbourside restaurant in Auckland's Ferry Building said he was looking at both raising prices and cutting the amount and quality of food on each plate to cut costs.
"You have to look at portion sizes and the quality," he said.
"Are you going to give people fillet steak or are they going to have only scotch fillet? If you look around town now you will hardly ever see a rack of lamb because you'd have to charge about $42 to make any money from it."
He said that kitchen and waiting staff typically started on the minimum wage of $11.25 an hour, rising to an average of around $14 with experience.
"It's hard to get labour at the moment anyway. If they can go and get more in large organisations like that [hospitals], I'm sure they will," he said.
The Labour Government has already raised the minimum wage by 60 per cent, from $7 an hour when it took office in 1999 to $11.25, and has signalled that it plans a further rise to $12 by the end of next year "if economic conditions permit".
Mr Rowe said ministers had effectively raised the minimum again by funding district health boards to pay more to their contractors, without going through the consultation process required to change the official minimum wage.
"For the Government to do this sort of covert, underhanded, sneaky deal is just typical of them," he said.
"I just hate paying tax for the Government to use my money to compete against me [for labour]."
He said labour costs typically made up 30 to 35 per cent of the selling price of a meal.
If wages rise by 27 per cent in line with the jump from $11.25 to $14.25, that would push up meal prices by 8 to 9 per cent.
In the year to June, restaurant prices rose by 3 per cent. This was faster than the overall 2 per cent rise in the consumers price index, but Mr Rowe said it was lower than increases of 9.3 per cent for fruit and vegetables, 9 per cent for meat, fish and poultry and 6.9 per cent for electricity.
Marja Verkerk of Building Services Contractors, which represents employers of 12,000 commercial cleaners, said it was only logical that the hospital cleaners' deal would affect negotiations this year for the commercial cleaners' multi-employer agreement.
"There is an ongoing shortage in the industry all around the country," Ms Verkerk said.
"It's the kind of job that students used to do. Now they work for McDonald's or The Warehouse.
However, other low-wage sectors do not expect to be affected. Retailers Association Auckland manager Russell Sinclair said few shops were unionised and shopkeepers paid "what the market dictates", rather than any standard rate such as $14.25.
"It could be setting a benchmark, I guess."
Andrew May of the National Association of Retail Grocers and Supermarkets said he did not expect any impact "as long as they don't touch the youth rates".
